Driving change: reforming urban bus services - A policy paper of the EBRD's Sustainable Infrastructure group - Changing Transport
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March 2019 Driving change: reforming urban bus services A policy paper of the EBRD’s Sustainable Infrastructure group
This policy paper contributes to the MobiliseYourCity This policy paper was produced in Partnership for sustainable urban mobility, to which the partnership with EBRD is a contributing partner. Acknowledgements This bus sector reform policy paper has been prepared by Colin Brader, ITP consultants, Ian Jennings, EBRD Senior Urban Transport Specialist and Kjetil Tvedt, EBRD Principal Economist. The EBRD gratefully acknowledges support and contributions from its co-publishing partners: • UITP international public transport association, reviewed by Ayman Smadi, Kaan Yildizgoz, Dionisio Gonzalez and Jaspal Singh. • Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, reviewed by Christian Mettke and Frederik Strompen. The EBRD also kindly acknowledges the contribution of speakers, Lisa Seftel Director of Transport (Johannesburg, South Africa) and Karolis Dekeris, Urban Transport Specialist (Kaunas, Lithuania) and the active participation of cities at the policy dialogue seminar: Tbilisi (Georgia), Yerevan (Armenia), Gjakova (Kosovo), Zarqa (Jordan) and Irbid (Jordan). The contents of this publication reflect the opinions of the authors and do not necessarily reflect the views of the EBRD. Hyperlinks to non-EBRD websites do not imply any official endorsement of or responsibility for the opinions, data or products presented at these locations, or guarantee the validity of the information provided. The sole purpose of links to non-EBRD sites is to indicate further information available on related topics. Terms and names used in this paper to refer to geographical or other territories, political and economic groupings and units, do not constitute and should not be construed as constituting an express or implied position, endorsement, acceptance or expression of opinion by the European Bank for Reconstruction and Development or its members concerning the status of any country, territory, grouping and unit, or delimitation of its borders, or sovereignty.
Contents
1. Introduction 4
2. The case for bus sector reform 5
3. Understanding the bus sector and setting objectives 11
The status of the bus network 12
The state of regulation 13
Understanding where planning and regulating happens 13
Understanding the market (users) 15
Understanding the market (operators) 15
Market consultation and surveys 17
4.The process of reform 19
Roles and responsibilities 19
Public sector and private sector responsibilities 19
Defining the new bus system 20
Route optimisation 20
Financial optimisation 20
Route integration 22
Tariff setting and integration 22
Defining a new operating model 23
Forms of contract 24
Branding the new bus service 27
Defining a reform plan 27
Compensating existing operators 29
Fair compensation 29
Operator association 30
Alternative options 30
Support measures 30
Driving change: reforming urban bus services March 2019 1
Contents (continued) 5.Managing reforms 31 Promoting reform 31 Political support 32 Institutional support 34 Operator support 34 Communication strategy 37 Importance of engaging users 38 Engaging with existing operators 39 Consultation 39 Negotiation 41 Capacity-building 41 Performance, evaluation and monitoring 41 Performance criteria (KPIs) 41 Collecting data 42 6. Additional resources 43 Annex 1. Public transport reform in the Philippines 44 Annex 2. Bus sector reform questionnaire and seminar 48 Annex 3. Working with the EBRD 52 2 March 2019 Driving change: reforming urban bus services
Glossary
ADEME French Environment and Energy KfW Kreditanstalt für Wiederaufbau
Management Agency
KPI Key performance indicator
AFC Automated fare collection
LAMATA Lagos Area Metropolitan Authority
AFD Agence Française de
Développement LRT Light rail transit
AVL Automated vehicle localisation MaaS Mobility as a Service
BRT Bus rapid transit MENA Middle East North Africa
CEREMA Centre for Studies and Expertise NUMP National urban mobility policy
on Risks, the Environment,
Mobility and Development O-D Origin-Destination
CODATU Coopération pour le PPP Public-private partnership
Développement et l’Amélioration
des Transport Urbains et PSC Public service contract
Périurbains
PTA Public transport authority
DBFO Design-build-finance-operate
SUMP Sustainable urban mobility plan
DBOM Design-build-operate-maintain
TfL Transport for London
EBRD European Bank for Reconstruction
and Development UCLG United Cities and Local
Governments
GTFS General transit feed specification
UITP International Public Transport
GIZ Deutsche Gesellschaft für Association (Union International
Internationale Zusammenarbeit des Transport Publics)
(GIZ) GmbH
Driving change: reforming urban bus services March 2019 3
1. Introduction
Bus services dominate our public transport systems, This bus sector reform policy paper is for city
particularly in emerging economies, due to their cost authorities who seek to transform bus services in
effectiveness and adaptability, as well as the ease response to user expectations and environmental
of reallocation and reconfiguration of bus fleets to challenges. It builds on experience from cities in
respond to changing service requirements. emerging markets and on proceedings of the bus
sector reform seminar held at the EBRD in London in
However, cities are facing intensified calls to reform July 2017.
their bus services to provide high-quality, safe public
transport services for their users and address Bus sector reform changes the way bus services are
environmental challenges, notably congestion and air provided. It is likely to have a major impact on current
pollution. To deliver sustainable solutions, cities are and future market actors, notably bus operators
increasingly looking to renew fleets and infrastructure, and passengers. The reform process will affect the
integrate their bus networks and introduce priority institutional, regulatory and operational structure and
bus corridors. Bus sector reform is recognised as a related planning, procurement, operation, monitoring
fundamental step in achieving these goals. and evaluation functions of bus services in the city.
The actors involved can be wholly public or include
Bus sector reform a large proportion of private operators and often
comprise a combination of the two.
Reform of the bus sector changes the way bus
services are planned, procured, monitored and The intention is to change the rules of the game, so
operated. It can fundamentally affect the role of while their objectives may be noble, the city must
the city authority1 through increased control over recognise the likely scale of opposition to reforms.
financial flows, risks and service obligations and, The reform process will require periods of detailed
in so doing, influence the composition, scale and consultation and negotiation to steer the reforms
duties of bus operators and service providers. The towards the intended outcome. Careful thought
need for the reform itself, and the process to deliver should be given to the process and ultimate goals
it, must fully reflect the current operating model, and priorities, in order to direct reforms along a well-
problem definition, service quality desired and prepared and determined path.
institutions and actors involved.
While presenting the “what” and the “why”, this
paper focuses particularly on the “how” to improve
Delivering on these objectives requires enhanced services by laying out the rationale and steps for cities
sector funding, regulation and monitoring and, to achieve bus sector reforms, with case studies,
importantly, a more engaged city authority to take an examples and illustrations. While it principally applies
active role in planning and regulation of the sector. to urban bus networks, many elements are relevant to
This is fundamental in order to provide financial regional and sub-regional public transport networks.
stability and to assume an increased level of risk, be
it political, operational and financial. To turn political
will into achievement, cities and national authorities
need to act in the interests of residents to deliver a
reform programme through effective and committed
negotiation with operators.
1
In this paper, “city authority” refers to the authority responsible for the planning, organisation and regulation of public transport services
within city boundaries. Its role may be taken on by a public transport authority (PTA) for the city or metropolitan area, as described on page 4
4 March 2019 Driving change: reforming urban bus services
2. The case for bus sector reform
Urban transport systems function within a complex The response of city authorities is defined by the
political, social and environmental context, imposing nature and intensity of these issues within the city
numerous demands and constraints that shape the environment and of the required, or desired, response
nature of proposed solutions for a given urban context. to externalities notably congestion, pollution and
safety. The scale and pace of reform is largely driven
Figure 1. Demands on and constraints of urban by the demand for change from users and other
transport systems residents of the city together with the political will and
resources of the city to deliver them.
For cities with low congestion or urban environment
Lack of capital constraints, reduced user expectations for off-peak
funds for fleet services, notably evenings or weekends, and where
replacement, low city resources are limited, low regulation systems may
maintenance provide the most efficient solution. In such a case,
capacity Multitude of operators are in open competition on each route
service providers, and compete for passengers by operating cheaper,
often with low faster or better services than their competitors. Direct
service, fare routes often provide the most attractive service
integration option, due to lack of any fare or service integration
Diverse
stakeholders and between competing providers. With low regulation
interest groups: public regimes, the city need not spend much money in
and private actors controlling service performance. However, this also
and civil society means that city control of the sector is weak and
Network effect- cash-based payments are likely to predominate, with
inter-connectivity little or no subsidy payments and resulting lack of
with other urban transparent accounts, financial or operational data.
transport services The city therefore has little ability to determine urban
transport policy or influence service provision, since it
Limited availability is bringing very little, notably funding, to the table.
of urban space;
road space is at
a premium Low cost
recovery, use of
subsidies to
sustain urban
transport services
Urban mobility is
a strategic public
policy agenda- strong
tendency for
political
interference
Dynamic urban
environment and
political context
Driving change: reforming urban bus services March 2019 5
Figure 2. Principal regulatory systems for urban transport
Low regulation Integrated system
Competition in the route Competition for the route
City environment
Urban environment Suburban Urban
Congestion Low High
Pollution effects Disperse Concentrated
Market response
Public transport Point-to-point Integrated system
(PT) services
Fare type Single Combined-time / distance based
Market structure Multiple providers Single / area providers
Regulation Low (licences) High (gross-cost contract)
Funding Low (for example, High (PT subsidy)
concession fares)
City role Licence grantor Planner and enforcer
As cities develop both the level of externalities and As externalities are priced out of transport service
user expectations increase. Low regulation systems through lack of regulation covering environmental
generate an increasingly imperfect market, in which and safety standards, users are encouraged to
externalities remain un-costed and operations make sub-optimal modal choice towards private
become increasingly inefficient, unable to cars, taxis and minibus and the quality of the bus
consolidate and make the investments required services deteriorates further.
of an expanding public transport system.
Such a system puts a high price on the community
by imposing an increasing level of external costs,
such as environmental pollution, safety and congestion,
onto all residents, users and non-users alike.
6 March 2019 Driving change: reforming urban bus services
Figure 3. Low regulation and the imperfect market
Lack of resources
Lack of enforcement Regulatory objectives unclear Lack of coherent policy
Passive inappropriate regulation
Operators Network
response characteristics
High risks Illicit control
Minimum investment Rigid network
and organisation Unsatisfied demand
Low service quality Legal, informal modes
Unsatisfied demand
Legal, informal modes
Imperfect market
Un-costed externalities
(environment, pollution, safety, congestion)
Source: Diagram developed from Figure 9 in the GIZ Sourcebook Bus Regulation & Planning.
At a certain point, this lack of city engagement under
a low regulation policy reaches its limit, and pressure
from discontented residents compels city authorities
to act.
Driving change: reforming urban bus services March 2019 7Decline of public transport in former centrally planned economies
Over the past twenty years, countries that The lack of effective regulation, funding, fare or
were once centrally planned have witnessed a route integration, has resulted in numerous private
dramatic decline in public transport services, operators with poorly maintained minibuses, not
in the face of rapid urbanisation, growing car operating to a timetable, competing with each
ownership and sustained strain on public other for passengers at bus stops and with no, or
funds. Public operators have struggled to limited, duty to accept concessionary fares. This has
obtain adequate funds for maintenance and resulted in a critical lack of skills and investment
investment, aggravated by an inherited policy in the sector and has limited the interest of larger
of concessionary travel for large parts of the operators to enter the market.
population.
In many cities, the poor state of public transport
Such operators have often been reduced to a services under such low-regulation scenarios now
core network, with an outdated fleet and low presents a clear case for reform towards more
quality of service and in some cases, have been sustainable urban transport solutions. This is given
entirely disbanded. In their place, a fragmented added urgency with the continued rise of private
private market has grown, with marshrutkas vehicle ownership, as illustrated below (example of
(minibuses) filling the gap with higher fares and Russia).
poor service, but with direct routes and faster
services better serving new residential and
employment areas.
45,000 400
40,000 350
340
35,000 317
300
30,000 270
258
250
244 246
233
25,000 226
207
200
188
20,000 176
167
161
155 150
144
15,000 138
114
95 100
10,000
76
59
5,000 45 50
- 6 -
1970
1980
1985
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Left-hand scale: Bus Tramway Trolleybus Underground Public inland waterway transport
Right-hand scale: Cars per capita
Source: National Research University, Higher School of Economics, Moscow, Russia.
Note: Public transport passengers (left scale), modal split (graph) and car ownership, 1970-2015 (right scale) – Russia.
8 March 2019 Driving change: reforming urban bus servicesWhy undertake bus sector reform?
Bus sector reform is needed when the existing The increasing global trend to shift bus technology
low-regulation model becomes unsuited to the from fossil fuel to electric powertrains will increase
requirements and expectations of the city and its the need for bus sector reforms. Such bus fleet
residents and there is a desire to achieve significant renewal schemes would require larger operational
improvement in the quality of bus services. This platforms consistent with the new capital and
reform may be initiated by a major transport project, resource requirements for such investments.
such as bus rapid transit (BRT) or light rail transit
(LRT), where major restructuring of the public Bus sector reforms should seek to raise the game in
transport system is required to establish feeder and urban transport services by restructuring how urban
secondary bus routes. services are provided and, where possible, by pricing
in externalities. This is achieved through increased
Often a bus network has grown through evolution sector regulation and introduction of more secure,
rather than purpose. In a planned situation, the safe and low-emission transport. The aim is to support
network may have been appropriate to serve the public transport as a credible alternative to car use,
needs of the city at the time of planning. As the city improving the quality of life of all city inhabitants
grows and the needs of its population changes, often
the bus network remains static. In many cities, the
reaction has been to add routes to the bus network to
plug apparent deficiencies without revisiting the merit
of existing routes. This process of evolution has often
led to a large, outdated and ineffective network.
Such services are often added based on commercial
opportunity, following the rationale of profit
maximisation rather than level of service. This
results in further degradation of public operators
through unfair competition from a less restricted
private sector.
Motivation for reform most commonly originates from Buses that are cramped, difficult to access and
either financial constraint or user discontentment. uncomfortable are not good for people with
The former can be due to the escalating cost of restricted or impaired mobility. Often the industry
subsidising bus services, together with an inability to is not able to improve without coordination and
control such costs while maintaining service levels. support.
The latter can result from protests about the quality,
Source: ITP.
cost or coverage of bus services. Further motivations
for reform can come from pollution and congestion
impacts (externalities) on the community, un
transparent practices or weak or unclear regulatory
capacity or incentives to perform.
Driving change: reforming urban bus services March 2019 9Barriers to reform of the bus sector
Barriers to reform can be summarised into six main themes:
1. Resistance to change. A status quo, or 4. Ownership of assets. The ownership of assets
equilibrium, has been established that, such as depots, stations, and vehicle fleets
while not optimal, is meeting a need. The can restrict opportunities for control over
private sector may have found a means of service provision and competition in the
making a reasonable return and the public market. Access to finance for new vehicles
sector a means of providing services that may create an inevitable reliance on existing
provides a network of sorts. While the service providers. Addressing such issues
service providers might be well established, requires understanding, engagement and
this does not imply that users are content strong commitment to change.
or that the city is receiving the level of
service it should from the bus network. 5. Increased transparency and accountability.
Licensed bus services are often dominated by
2. Lack of funds. Improvement of bus services cash-based payment systems, with resulting
requires investment in the bus fleet and lack of transparency on ticket receipts and
facilities, may require funds for the reform wage incomes. Companies may seek to
process itself and may engage the city in under-report income to reduce tax exposure.
providing longer-term operational subsidies. By introducing new operating contracts (for
With often limited ability to increase fares example, public service contracts (PSC)) and
to compensate, cities need to engage new electronic or automated fare collection (AFC),
funds for the reform process, where little reforms can impose new accounting standards
has been committed previously. and fiscal obligations.
3. Appetite for risk. Change requires 6. Conflicts of interest. Those that are
determination and commitment from city instrumental to the reform process might
authorities, with an appetite to reform for either gain or lose through the action of
improvement. Inevitably this invokes risk. reform. This might be the case where there is
Risk may be political, affect relationships or a strong public-sector operator or where an
financial. It may be all three. The existence authority currently gains income from licensing
of risk reinforces the need for clear processes. The reform process should ensure
objectives and a planned and systematic that any self-interest is moderated by the group
approach. Reform is most successful where and strong leadership retains commitment to
there is a champion with sufficient influence its primary goals.
and commitment to engage stakeholders.
10 March 2019 Driving change: reforming urban bus services3. Understanding the bus sector
and setting objectives
Before embarking on reform of the bus industry it Road fatalities in the EU, by transport mode
must be clear both what the current status is (and
who are the key stakeholders) and what is the desired
outcome of reform, in other words what the reform is
seeking to achieve.
Transport enables a city to support economic growth
and social wellbeing within a context of acceptable
environmental impact and financial and political
constraints. As such, the objectives set for transport
Car 46.4% Pedestrian 19.8.% Motorcycle 17.9%
must relate to achieving either the strategic interests Bicycle 6.6.% Tram 3.3% Bus 0.4.%
of the city or improving the wellbeing of its residents.
Bus sector reforms are often a key tool for effective
Reform objectives must, therefore, support wider city implementation of a SUMP. Common objectives for
objectives with the specific role of public transport reform include:
defined relative to other transport modes. Where
public transport is dominant, or its role responds • Financial efficiency – to contain funding support
to wider objectives, then a more comprehensive by government and ensure affordability of services
approach for high levels of accessibility and for the users.
willingness to invest in the transport system is
needed. Where public transport is less dominant or • Environmental controls – to limit or reduce the
its intended role less emphasised, then reduced adverse effect of the transport system on the
targets for accessibility and service levels might environment in terms of emissions, noise, safety
be appropriate. or visual impact.
Such objectives are often set within a sustainable • Accessibility – to ensure transport is accessible to
urban mobility plan (SUMP)2 for the city. A SUMP all, including disadvantaged groups and mobility
aims to create an urban transport system by impaired, and that communities are well served.
addressing, as a minimum, the following objectives:
• Level of service – to improve quality of services
• Ensuring all residents are offered transport towards the needs and expectations of users. The
options that enable access to key destinations nature and scale of current deficiencies should be
and services. assessed and improvements balanced with the
needs of financial affordability.
• Improving safety3 and security.
Once objectives are set and agreed across all
• Reducing air and noise pollution, greenhouse gas stakeholders, a set of actions can be developed,
emissions and energy consumption. with full account taken of current conditions, usage
and demand.
• Improving the efficiency and cost-effectiveness of
the transportation of people and goods. Imagine your city in 20 years: what would you want
it to look like? A place where children can play
• Contributing to enhancing the attractiveness safely? Where the air is clean? Where you can
and quality of the urban environment and urban walk to do your shopping? With lots of parks and
design for the benefits of residents, and of the green space? Where businesses can prosper?
economy and society as a whole.
“The spirit of a SUMP”, taken from Developing and Implementing
a Sustainable Urban Mobility Plan, European Commission 2013.
2
Developing and Implementing a Sustainable Urban Mobility Plan, European Commission (2013). 3Road fatalities data, EU Care database (2011).
Driving change: reforming urban bus services March 2019 11MobiliseYourCity Partnership
The MobiliseYourCity Partnership The Partnership is supported by its implementing
(www.mobiliseyourcity.net) is a global and partners: the French Environment and Energy
inclusive network of cities and countries as well Management Agency (ADEME), Agence Française
as an umbrella alliance of European development de Développement (AFD), Centre for Studies and
partners to support the planning and delivery of Expertise on Risks, the Environment, Mobility
sustainable urban transport systems.
and Development (CEREMA), Coopération pour le
The partnership assists beneficiary partners, Développement et l’Amélioration des Transport
namely local and national authorities, in preparing Urbains et Périurbains (CODATU), the EBRD, GIZ,
sustainable urban mobility plans (SUMPs) and, Kreditanstalt für Wiederaufbau (KfW) and the
where relevant, national urban mobility policies and Wuppertal Institute for Climate, Environment and
investment programmes (NUMPs), applying adapted Energy. It contributes to the UN’s Agenda 2030,
techniques in stakeholder engagement, impact specifically Sustainable Development Goal (SDG)
mitigation and evaluation and monitoring methods. 11: Make cities inclusive, safe, resilient and
MobiliseYourCity provides sets of methodologies sustainable.
and toolkits and links beneficiaries to Communities
of Practice exchanges and capacity development
programmes to improve availability of funding
support, including emerging green funding sources.
The MobiliseYourCity Partnership is jointly co-
financed by the MobiliseYourCity European
Commission's Directorate-General for International
Cooperation and Development, the French Ministry
of Ecological and Solidarity-based Transition, the
French Facility for Global Environment, and the
German Federal Ministry for the Environment,
Nature Conservation and Nuclear Safety.
Source: istockphoto.com
The status of the bus network networks, lack of information from private operators
can be a critical problem in reforming the bus
In most instances the known qualities of the bus network. Developing efficient survey methods is
network relate to: therefore critical in defining new networks, providing
credible network data for the reform process and
• number of buses per route, type, availability allocating risks and subsidies.
• service level in terms of routing, hours of operation Additional information needed to assess the bus
and frequency system includes:
• revenue per passenger type • passengers per line, per day
• operating costs. • bus operating speeds
However, such information may only be available • boarding and alighting by stop
from public operators or from systems with effective
ticketing and control systems. For poorly regulated • origin-destination (for network restructuring)
12 March 2019 Driving change: reforming urban bus services• breakdown of operating cost The state of regulation
• user perception of service level In many instances, the way in which public transport
is regulated responds to inherited legacy rather
• non-users’ expectation of service level that would than current needs. In such cases, a critical review
to attract them to use the network. is necessary, covering governance, regulation,
contractual arrangements and assessment of the role
Reliable data underpins the credibility of the and authority of stakeholders and levels of influence.
reform process. Without it, restructuring of the bus This should include the institutional capacity roles
network risks user discontent as new lines become and relationships, of those within the bus system,
overcrowded or infrequent and fares are disputed. including bus operators themselves.
Without it, negotiations with private operators are
biased in favour of the better informed and risks and Understanding where planning and
subsidies poorly allocated, to the detriment of the city regulating happens
and its residents. The pursuit of reform through lengthy
negotiation and change requires robust data collection, While most cities have a transport planning unit
initiated during preparation of the reform plan and within either a transport or engineering division, the
monitored and updated through the reform process. resources allocated to public transport vary widely.
Institutional mapping will aid the understanding
In using such data, there needs to be a full awareness of where decisions are made in the planning of
that purely observing movements within an existing public transport networks, levels of integration
transport network does not necessarily constitute with other city and national departments, budgets
underlying demand, but rather illustrates market and resources allocated and the contracting and
reaction based on the supply of services. As a result, monitoring of services.
latent or induced demand from new services may
often not be accounted for.
Understanding the network (mapping tools)
New mapping tools provide an opportunity Such tools have enhanced bus network planning
for cities to tackle the critical data deficiency, (re Odessa below) and been applied for preparation
especially for low regulatory systems. of bus route maps in Amman, Cairo and Cape Town,
among others.
In many instances the true extent of the bus
network may not be known either because a)
routes are not monitored and are allowed to
deviate from licensed routeing; b) licenses are
not given; or c) exact routeing is not specified.
In such instances digital mapping tools can
be useful. Cell phone applications, such as
TransitWand, can be used on vehicles to
geocode routes, stopping places and boarding
and alighting. This information can be converted
into a general transit feed specification (GTFS)
network for compatibility with route planning
software. Care must be taken not to assume
that network mapping information represents
demand (see Chapter Four). Source: ITP.
Driving change: reforming urban bus services March 2019 13Stakeholder mapping is a valuable exercise when A city with a mature and integrated transport policy
existing resource and practices are insufficiently may have an established public transport authority
known or when stakeholders’ roles frequently extend (PTA) either as a dedicated unit or as a function within
outside their formal mandate, often as a result of another department.
operational imperative.
The core tasks of a PTA generally comprise:
Building a roadmap for Greater Cairo
Transport Regulatory Authority (GCTRA) • planning of infrastructure and services to meet
transport demand, combined with the financial
The GCTRA was established in 2012 as a public planning of fare level and required subsidies
transport authority to regulate, plan, monitor and
assess performance of transportation in the Greater • tendering, contracting and monitoring contracts
Cairo region. However, its role and capacity has with public transport operators under a regime
remained limited and it needed to better define its based on equal treatment for public and private
priorities and actions within the sector, contribute operators
towards sector policy and development objectives
and build the required funding and capacity. • preparing improvements to public transport
system, for example infrastructure and service
In order to achieve this, GCTRA is preparing a expansions (metro, LRT, BRT, buses), ticketing
roadmap and short-term action plan, based on systems (including AFC), integrated fares,
comprehensive stakeholder mapping, as per the passenger information)
framework below.
• developing sustainable transport modes
Mandates Capacities (public transport, soft modes for example, cycling
Legal status Funding and walking)
Area Staffing
Themes Departments in • promoting public transport and informing the
Governance planning, regulation, public.
Regulatory framework project development
A GPS-based automated vehicle localisation
Actions Stakeholders (AVL) system provides real-time data for improved
Policies Public, private partners operational management allowing both operators
Development plans User participation and the authority to monitor performance. Installation
Projects Communication of such a system could constitute a pre requisite for
Operations strategy, methods subsidy payments and/or fleet renewal.
The action plan will establish objectives and priorities
to support, complement and, where necessary
redefine, the role and efforts of stakeholders. The
roadmap will provide for a staged development
of GCTRA, initially focused on developing priority
actions, a coordination framework to pool resources
for delivery and building capacity and recognition of
the organisation
The assignment is supported by the EBRD and
implemented by consultants ITP (UK) and InfraOne
(Egypt). Adoption of the plan is anticipated in Q2 2019.
Source: EBRD.
14 March 2019 Driving change: reforming urban bus servicesFigure 4: Key functions of an urban public Understanding the market (operators)
transport authority
How the operating market is structured needs to
Management be understood; for any public sector operator, what
role do they play and what support do they receive;
for private operators, their scale and composition,
operating and business practices and the extent to
Planning Projects Contracting which their obligations are different to those of the
•C
ommunication
public operator. Moreover, the financial realities of
• T ransport •P
rocurement
planning operations need to be understood prior to reforms
• Bus rapid •M
onitoring
and prior to any commitment to offer financial
•F
inancial transit
support through Government funding or otherwise.
planning • Smart card
•P
assenger UITP working group on informal transport
information
The International Public Transport Union (UITP)
launched their “Working Group on Formalisation or
Understanding the market (users) Corporatisation of Informal or Individually Operated
Public Transport” at the UITP MENA congress and
Public transport users are not a homogenous group. exhibition in April 2018, with representatives of
However, while diverse in terms of their status and public transport regulators, operators and industry
needs, they may only be offered a single service type from 11 different countries. The working group has
(for example a standard bus or minibus). Various the following main objectives:
user groups may be granted concession fares,
allowing them to travel at reduced rates or for free. • Steering UITP activities on the relevant topic at
Such social policy seeks to meet affordability needs the global level.
or recognise the contribution to society of certain
groups (civil service, war veterans and so on). The • Facilitating networking and exchange between
affordability of concession fares for the city authority members on formalisation.
will depend on how well they target social need while
maintaining the efficiency of the transport network • Compiling, developing and building
as a whole. international knowledge.
Public transport users can also be diverse according • Benchmarking projects and experiences.
to their income, with consequential differing
willingness to accept higher fares in return for • Focusing on current issues, analysing and
improved services. Where objectives relate to promoting innovations.
reducing car use, there may be a need to consider
higher service levels for users who may otherwise • Stimulating debates and interactions.
choose to travel by car, where current service
standards are considered to be insufficient. • Preparing advocacy arguments and positions.
The need to understand the views, needs and The group will aim to share knowledge and provide
responses of public transport users is fundamental coordination and integration of solutions to
and requires effective and regular market informal transport. UITP also developed a three-day
consultation and surveys. capacity-building programme on the formalisation
of informal transport to support its members.
Source: Kaan Yıldızgöz (UITP).
Driving change: reforming urban bus services March 2019 15As private operators are driven by profit, their Where new operators are sought, there needs to be a
prevalence is an indicator of commercial opportunity, definition of the market opportunity and the proposed
and often due to the lack or insufficiency of services relationship between new and existing operators.
by the public operator. Changes to the bus network
or to the means by which public transport is organised One key element of successful bus sector reform is
or contracted will therefore have an impact on to understand the financial realities of the affected
existing operators. bus industry. It is thus indispensable to analyse the
financial context of bus operations. This important
There will be inherent resistance to change because step should build the basis for any financial
it threatens profits and the current business model decision by the government, especially during the
of operators. In such cases, the authorities must development of financial support mechanisms.
understand in detail their business’s environment, For an example of relevant steps to be taken
financial position, legal requirements, motivations by government to develop a financial support
and business plans and practices, in order to define mechanism, see Annex 1 Public Transport
reform strategies which offer workable solutions and Reform, Philippines.
opportunities to enable enough operators to support
the change process.
Figure 5. Understanding the market: users and operators
Users Operators
Needs Existing operators
• Income • impacts on profit
• Dependents • impacts on opportunities for expansion
• Commute • Impacts on reliability of patronage
(competition)
• Vulnerable groups (concessions,
accessibility
New operators
Willingness to pay • Relationship to existing operators
• Shorter waiting times • Competition
• Higher comfort • Consolidation of exisiting operators into
new bodies
• Faster journey times
16 March 2019 Driving change: reforming urban bus servicesMarket consultation and surveys
Effective and consistent consultation is essential Data collection using traditional paper-based methods.
to determine the principal drivers and nature of
the reform. Such surveys can provide a credible basis for
assessment of user expectations, gauge public
User preferences can be assessed using user acceptability for reform components and priorities
surveys, for example: and willingness to pay for service improvements.
This provides vital input to the definition of the path of
• Passenger surveys, at bus stops/terminals and/ reform and its overall objectives and timeline.
or onboard buses to determine travel patterns
and preferences. Operators can be consulted through one-to-
one interviews and/or operator and stakeholder
• Tariff surveys and stated preference surveys4 workshops. Depending on the nature and scale of the
to assess acceptance of tariff increase or proposed new operating contracts and, this exercise
adjustment for service improvements. should be tailored to interested operators at a local,
regional and/or international level.
• Satisfaction surveys, to assess the level of
appreciation for various components of
existing services (for example cost, regularity,
punctuality, cleanliness, driver behaviour and
so on).
• User focus groups to determine user expectations
and priorities for network development and service
quality, as well as suggestions for improvement.
4
Stated preference surveys request the respondents’ preference to a series of alternative options for service improvement, with corresponding
outcomes. It is frequently used to establish the ‘willingness to pay’ of users for a given service improvement.
Driving change: reforming urban bus services March 2019 17Figure 6. Smart data collection method
GPS GPRS/3G Internet
O-D Data server
Geo-spatial database
including O-D survey
Web server metadata
APIs
O-D Capture app
Core editable Qs:
O-D Data review O-D Visualiser
• O&D
• Track survey progress • Data binned by location
• Mode used
• Real-time • Simple averages
• Purpose
• Simple view/download of • CSV + GeoJson download
• Responses batched
raw data
• OTA upload
Using smartphones and tablets to capture data and web analysis tools can increase accuracy,
reduce cost and improve analysis.
Source: ITP data collection and network analysis methodology for Manila.
The nature of potential future operators in the
reformed bus market is an essential component
in determining the shape, scale and time frame for
reform. Reform can only succeed if there are actors
available to deliver the required level and quality of
services in the reformed market. Understanding
which operating market should be targeted is a
critical part of the reform strategy and a source of
constant referral and revisit throughout the process.
18 March 2019 Driving change: reforming urban bus services4. The process of reform
Roles and responsibilities • providing the necessary infrastructure such as
bus stops, separate busways and terminals
In contexts where city authorities provide strong
engagement and funding of public transport • negotiating with and subcontracting operators
and benefit from mature operating markets, the for routes or route packages
organisational model of public transport is
generally the following:5 • monitoring and controlling the performance of
such operators.
"A combination of transport authority planning
and control of public transport services on the Bus services can be provided by public or private
one hand and competition between independent operators or a mix of both, according to operational
operators for the operation of public transport and strategic requirements, national regulation
services on the other has the strongest merit." and local context. Routes or route packages allow
operators to compete for the route. The operators
Moreover, publicly owned operators are generally able to satisfy quality requirements and offer the
allowed within the competitive market, provided most economically advantageous tender will be
they operate under the same conditions as private awarded a contract for a given
operators, ie under a ‘level playing field’ for all period of time.
market players.6
While in larger cities a transport authority may
Public sector and private sector responsibilities function as a separate entity, in many cities it sits
within an existing city department. However, its
At the heart of bus sector reforms are the definition function is more important than its location.
of new roles, responsibilities and contract
arrangements for public and private operators. This As bus services reform, it will be necessary
often includes the creation of a transport authority for the city to consider taking on some of the
role either with the city or as an autonomous entity, responsibilities for the new fleet and infrastructure
with responsibility for: and ensuring financial sustainability for operations.
This particularly relates to those tasks shown in
• planning the route network the shared portion of Figure 7.
Figure 7. Principal responsibilities of public and private sector
Public sector responsibilities Private sector
• Provision of infrastructure responsibilities
(bus stops separate busways and • Depot provision Vehicle maintenance •
terminals) Route operation •
• Infrastructure maintenance
• Planning the route network Train & employ drivers •
• Provision of vehicles
• Monitoring and control
• Revenue collection
• Contracting
5
European Union research project, ISOTOPE, (Improved Structure and Organisation for urban transport operations of passengers in Europe)
completed in 1997 and follow up project MARETOPE (Managing and Assessing Regulatory Evolution in Local Public Transport Operations in Europe).
6
As clarified by European Commission and regulated under EU 1370/2007.
Driving change: reforming urban bus services March 2019 19Defining the new bus system data, data from mobility providers (such as Uber) or
ticketing data.
Reform of a bus sector is best implemented on
an optimised network, in order to produce good Financial optimisation
outcomes for the user and address key elements
of poor-quality service. The new bus network will Financial optimisation is required where:
generally require two main reform components
or stages: • the relationship between revenue and operating
cost (cost recovery) is insufficient, often resulting in
• First, an optimised network (routes and service high subsidy levels
levels) should be defined, based on travel patterns
(origin-destination) of bus users. Optimisation can • compensation payments and other financial flows
be related to routes or financial performance but are not reliably and predictably made, resulting in
ideally should be a combination of both. high commercial risk and investment backlog.
• Secondly, integration of services, combining • Financial optimisation comprises tariff policy,
route and tariff integration, is the ultimate step including fares and concessions. However, fare policy
of combining several service lines into a single, is often a highly sensitive political issue for the city
attractive transport offer to the user. and the appropriate policy must balance the need
for cost recovery and operational sustainability with
Route optimisation the conflicting political sensitivities and imperatives.
The most appropriate fare policies balance such
A bus network that is not periodically evaluated will needs by containing fare levels to ensure sustained
develop inefficiencies as the city changes and the passenger levels while offering concession fares to
needs of the residents and users of the city alter. certain groups of the population, such as low-income
Network inefficiencies relate to the supply of bus groups, the elderly or children.
services failing to meet the demands of the travelling
public. This optimisation requires study of mobility
patterns and modal choice preferences. Moreover,
care must be taken not to assume that high bus
passenger levels necessarily equate to demand
being satisfied, as bus trips may have already been
distorted by an existing network which no longer
matches demand.
Route optimisation may also have to adjust to new
congestion patterns and infrastructure availability
(road lanes, bus stops and so on) to adjust the route
network and locate bus priority corridors.
Understanding of the network, for both supply and
demand, will be greatly assisted by modelling tools,
based on a comprehensive and up-to-date data set.
Such tools may have been produced as part of a
SUMP, notably a multi-modal assignment model. If
this does not exist, other assessment techniques
can be used through collection of route-based
boarding-alighting data, harvesting mobile phone
20 March 2019 Driving change: reforming urban bus servicesFormalisation and corporatisation of informal or individual public transport operators in Turkey
Municipalities throughout Turkey have increasingly sought to address deteriorating services manifested by the
deformation and concentration of public transport lines in the city centre, poor safety, comfort or social security
standards, poor driving behaviour, no data for evaluation and planning, no transfers or service integration and
low tax revenues.
The reform model on the next page illustrates the steps for transfer of responsibilities from individual ownership
to institutional (corporate) bus operations, suitable for high-quality bus services. It was mainly developed for
Turkey but is applicable more broadly.
From individual to institutional
Institutional Institutional Institutional Institutional Institutional Institutional
Rationalisation Rationalisation Rationalisation Rationalisation Rationalisation Rationalisation
Line pool Line pool Line pool Line pool Line pool Line pool
Revenue pool Revenue pool Revenue pool Revenue pool Revenue pool Revenue pool
Cost pool Cost pool Cost pool Cost pool Cost pool Cost pool
Fleet pool Fleet pool Fleet pool Fleet pool Fleet pool Fleet pool
Staff pool Staff pool Staff pool Staff pool Staff pool Staff pool
Rights pool Rights pool Rights pool Rights pool Rights pool Rights pool
Personal Personal Personal Personal Personal Personal
Association Umbrella
chamber company Company
Owner Partner
operator Share holder
The reforms were applied differently by • Keyseri: individual operators, gross cost
municipalities in response to their particular local contracts, route restructuring.
context:
• Sanliurfa: municipal company, buses rented
• Istanbul: five companies, shares by licence from individuals (fixed rental value); former
holders; individually owned public buses; gross drivers recruited by company.
cost contract (eight years); bus maintenance
facility provided by authority. The principal lessons learned from the reform
process were: take a step by step approach;
• Edime: operator cooperative: biennial elections start with electronic fare collection first; there is
of operator representatives to management no single formula; start with the most organised
board; management contract with each group; each step may turn up a new problem; non-
bus owner/licence holder; resource pooling technical aspects are important and participation
(revenues, vehicles, staff, costs, new bus is key.
purchases); restructured bus network. Source: Kaan Yıldızgöz (UITP) and Erhan Öncü (U-Art).
Driving change: reforming urban bus services March 2019 21Route integration prioritise affordability and maximise patronage.
Through the development of a SUMP, fare elasticity
Free flowing transport systems may require little may have been considered, possibly using simple
service integration as buses can travel where stated preference surveys to test user sensitivity to
demand is highest and point-to-point services can proposed fare changes with corresponding levels of
operate with minimal constraint. However, as cities service. Even if current fares sit well within the realms
expand, objectives change and/or operators are not of affordability, increases may be met with opposition.
effectively meeting user need they may require larger Any fare increases must thus be treated sensitively
bus fleets to transport passengers. Services may and form part of the communication plan for the bus
become increasingly constrained by congestion sector reform.
and pollution externalities, requiring increased
service management. Tariff integration is the key element of service
integration for the user, neutralising the cost related
Service integration responds to these constraints to changing bus or transport mode during the journey
by focusing on overall journey patterns of transport and thus encouraging choice of the most efficient
users and combining travels into several trips. This combination of routes, rather than with the fewest
is notably applicable for multi-model transport with changes. This can be achieved in two main stages:
high-volume corridors, and dedicated corridors for
rail and bus rapid transit, with a hierarchy of Combined fares, where a reduced fare, normally
secondary and feeder bus lines. with single ticket, is offered for a journey comprising
more than one mode or bus. These are often formed
Tariff setting and integration by simple agreement between two operators for
mutual ticket acceptance with an agreement for
Tariff policy is a compromise between cost recovery redistribution mechanism on monies received. This
of providing services and affordability for users. A could comprise, for example, “metro plus bus” tickets
further dynamic is the application of societal policies for metro feeder routes.
to subsidise some types of user such as children,
elderly, students and so on. Through the reform Integrated fares, where several trip combinations
process, it is important not to penalise existing can be made with the same ticket for the same
users or compromise the potential to attract new fare, notably tariff zones, time-based tickets and
users by setting the tariff too high. A commercial hopper fares (free transfer). This requires a more
approach may seek to set fares according to revenue comprehensive agreement, usually through operator
maximisation, whereas a societal approach will association or with the city, for recognised ticket types
and redistribution of fares, often on passenger or
vehicle-kilometre basis.
Tariff integration often provides the route to service
integration, by reducing or eliminating the financial
penalty for changing transport mode or bus and
thus better aligning user payments to the level of
service received.
A key tool for tariff integration and development of
adaptable ticket fares are automated fare collection
(AFC) systems, widely used in larger cities and towns,
often implemented with real-time information (RTI)
Source: ITP. and bus fleet management systems for effective user
Collecting fares in cash is slow, opens potential information and fleet management. To understand
for fare leakage and robbery.
22 March 2019 Driving change: reforming urban bus servicesmore about preparation and implementation of AFC or initial equity participation in the new operator, if
systems, the reader is referred to the EBRD Policy required by the market or the reform process itself.
Paper “On the move: delivering automated fare Such a contribution from the city could anticipate, for
collection” available at www.ebrd.com (see page 43). example, gradual phasing out of existing operators
with parallel buyback by operators from the equity
Adoption of an AFC system can have additional, stake of the city.
non-tariff benefits such as:
Ownership and equity participation in the operator
• creating an extensive user database, which is highly setup thus needs to consider the optimal balance
informative for operational and network planning between three main actors in the new bus services:
• collecting user information, both real time and • the city (and/or public agencies)
post journey, and user feedback tools improves the
passenger experience • existing operators (operators displaced by the
new services)
• improving safety by the removal of on-board
cash collection • new operators (with requisite operational experience).
• providing a platform to expand Mobility as a This operator setup should consider the optimal
Service (MaaS) functionality. balance between such actors at each stage of
the reform process, considering that the reform
Defining a new operating model period may require a transition period to establish
the company and bus operations, ensure risks are
Efficient bus services require fixed infrastructure to manageable and allow the operators to develop the
provide regular and quality services. This notably technical and financial ability to assume operators
includes depots for maintenance and stabling, independently. The participation of city in the
requiring available land sites with suitable road company may be considered through this transition
access. Moreover, development of higher capacity phase, to ensure alignment of city actions, such as
bus routes on priority bus corridors (or bus rapid land for depots, bus priorities, leasing of buses etc, for
transit) require higher levels of street infrastructure. efficient provision of services and allow subsequent
Such infrastructure comprises strategic assets for release of equity to new operating owners.
the bus system and imposes economies of scale
(fleet size, workforce and so on) for operations. The balance of existing and new operators should
Consideration of such fixed assets is critical in principally be an operational and market-driven
determining efficient company size and related form assessment, to ensure the required skills are
and scope of contract. provided in the new structure, the operators are
sufficiently represented and incentivised and, most
Improving bus services may require skills outside importantly, that the new operations are sufficiently
of the local market and bringing in regional or aligned with market expectations to ensure efficient
international expertise. However, this consideration tender response.
must accompany engagement with the local market
to provide opportunity to participate in the new
operations, where possible.
Moreover, the nature of reform, the risks and timeline
involved may require direct participation of the city
in bus operations, by providing or facilitating new
operating assets, such as the depot and fleet, and/
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